Airline denies cuts in services

Press, 16 June 1983, Page 24

Airline denies cuts in services

PA Auckland Air New Zealand executives have rebutted a statement about cuts in domestic services made on Monday by the chairman of the company, Mr R. A. Owens. An airline spokesman said yesterday that it was the airline’s policy to remain with its present domestic network, and to develop its profitability. “We are not planning any cuts to the domestic network,” he said. However, on Monday, Mr Owens told the Wellington Rotary Club that the airline could not afford to run social services on unprofitable routes, no doubt at the behest of politicians. He said unprofitable routes were now being reduced and should all be phased out by the end of the year. The airline spokesman declined to make any comment on Mr Owens’ remarks when it was pointed out that they seemed to be in conflict with those of the airline. When asked later on Mon-

day about specific routes to be cut, Mr Owens said, “It will just occur by the way the competition comes in. We are essentially satisfied with what we are doing.” If the competition was undercutting, or was so strong that the company could see itself losing money, action would be taken, he said. “It is entirely over to our staff who are planning services for the next 12 months. They will have regard to the profit-and-loss situation as they examine them.

“We would just like to cut back on frequency, but where the service is hopelessly uneconomic, naturally it would have to be cut out,” Mr Owens said. Mr Owens remained adamant last evening that the airline’s uneconomic routes are being reduced. He said that he. stood by his statements of Monday.

Asked to comment on the company’s statement, Mr Owens said he could see no discrepancy between his remarks and that of manage-

ment. “Anything that is not making money for the airline will be reduced or cut out. If you want to be constructive there is no discrepancy,” Mr Owens said. Over the last three years the airlines had reduced a number of domestic services, and removed a small number of airports from the network. However, as the airline pointed out yesterday, there had been a recent tendency to add to domestic services. At the end of 1980, a Westport-Wellington service was added, and last year the Hamilton-Wellington Boeing 737 service was reinstated, together with a new Tauranga-Wellington service and a Napier-Christ-church service. Next month, a new Auck-land-Nelson service will begin. Several times between 1981 and mid-1982 the airline announced that domestic services would have to be reassessed, with possible cuts.